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Jefferson East Investing Guide

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Here's Model D's guide to investing in Jefferson East. Also check out our guides to visiting and moving to Jefferson East.

It is early morning in Jefferson East. The sun is rising over the
old business district, and over the shopping centers, the historic
homes in the Jefferson/Chalmers district, the new million dollar homes
on Grayhaven Island, the infill homes for working families, and homes rehabbed by Habitat for Humanity.

It’s not yet prime time. It is a promising time, however, tempered
by the risk of urban living – a perfect combination for entrepreneurs
like Lisa Burnett and Josephine Marino, who own two large abandoned
buildings but believe a new day is coming. They think of it as a
“calculated risk.”

Marino,
a Grosse Pointe Park artist, had outgrown her home studio and was
looking for a larger space. She spotted one on East Jefferson, near
Alter Road, that met her criteria, plus some – a three-story, 30,000
square foot former BF Goodrich tire store and warehouse. But there is a
marketing challenge ahead for this huge space. Marino envisions a
possible café/exhibition/performance space on the first floor, rented
artists studios on the second floor and the third floor reserved for
her own work. Her potential investors are people on both sides of Alter
Road – Grosse Pointers looking for an artsy, urban experience and
Detroiters looking for a place for creative expression. “It’s the sheer
geography” of the East Jefferson location that drew her in, she says,
“(and) the building itself has a really great energy. I’m not so far
down Jefferson – and I’m pretty close (to Grosse Pointe).” She has her
doubters. “I’ve been asked, ‘Who are you going to get to go there?’ ”
Her response? “It will be so cool that they’ll want to go.”

Marketing push

Cool, in fact, is the vision of the Jefferson East Cool City
initiative, recognized by the State of Michigan for its progressive
goal of supporting incubation for technology and entertainment
businesses in the traditional business district. Its annual music
festival, “Jazzin’ on Jefferson,” gives the neighborhood a marketing push by reinforcing the brand of the area, says Chris Garland, program director for the Jefferson East Business Association (JEBA).
In addition to restaurants and businesses, JEBA also showcases
“Eastside Living” at the festival, featuring the various housing
options available in Jefferson East.

“It doesn’t spur development, but it promotes what’s going on,”
Garland says. “Investment is absolutely something we tout to anyone who
is listening. We talk about “Jazzin’ on Jefferson” as something that
reinforces what’s exciting here, reinforcing the importance of making
that investment.”

JEBA
promotes investment in the area with assistance including facade
improvement grants, small business loans, historic tax credits,
marketing consulting and reduced rent incentives for entertainment and
technology-related business. The association is also recruiting apparel
shops, specialty food markets, florists and restaurants and other
businesses.

Investors now need a creative vision and a leap of faith. “Maybe I’m
a little naďve, but if you offer people something that is safe and
close, hopefully, they’ll step out of their security blanket,” says
Marino. “Grosse Pointe does not offer much in the arts. If we want
anything, we have to travel. I don’t want to drive to Birmingham. I
like it because it is close. As long as it’s safe, secure, and clean,
they will come.”

Marino’s project may help erase the borders between Detroit and its
suburbs by stressing commonality over geographic division. “It was
always my thought for the building – to bridge young and old, rich and
poor, black and white. I like that in my own life. …I’ve talked to a
lot of Detroiters (in the area) who are excited. They also don’t feel
that they have anywhere to go.” She has been asked by Detroit residents
to provide space for comedy, dance, and musical entertainment as well
as restaurant space. “I have Grosse Pointe people who want me to
provide art and poetry. … My real love is the youth. For teenagers,
there’s no cool place to go. Grosse Pointe does a lot for sports, but
we don’t do much in terms of the arts.”

A neighborhood jewel

Lisa Burnett believes her 5,000 square foot Monticello Ballroom is
“a jewel that hasn’t been tapped.” She’s not deterred by the current
state of the storefronts. In fact, she’s a conservative developer, says
Garland. “Like Josephine Marino, she does development the old fashioned
way. She’s not coming in with a massive bank of money or a great deal
of history in development. Nor is she leveraging all of the economic
development tools that are out there. She’s leasing out her space,
bringing in revenue and reinvesting in her property.” Garland says
Burnett has benefited from façade improvement funding through the Cool
Cities initiative and is restoring the building’s ballroom for
functions like weddings.

With the vacant buildings, lack of much business activity, scarcity
of parking and personal and property risk, developers working in
Jefferson East “make a calculated risk,” Burnett says, adamant that
better times are ahead for the area. “Royal Oak didn’t become Royal Oak
overnight. It may not have had the level of decline, (but) there are
some significant parallels as to how the area was.”

One
of the earliest developers in the area and longtime proponent of
Jefferson East, Michael Curis, is cautiously optimistic for future
development in the area. With Riverbend Plaza, Heritage at Riverbend Condominiums
and Mack-Alter Square to his credit, he admits the future isn’t clear.
“A lot of people are taking a wait-and-see attitude. Because of that
there is a lot of indecision right now,” says Curis, who is also a JEBA
Board member. “We’re going through a very difficult time. Our focus is
maintaining what we have and maintaining it very well, and if the
opportunity comes up, to expand.”

He’s excited about the prospect of a landscaped street improvement
plan for Jefferson, under development by the business association.
“That’s the one thing we need to do. Above anything else we need to
push and get an island in the middle,” he says. “It extends the
beautiful (streetscape) from Grosse Pointe. It slows traffic down. It
makes a much prettier drive than nine lanes of asphalt. It raises the
value of all the property that surrounds it and gets people to want to
reinvest.”

Two development styles

In some respects, there are two main streets along East Jefferson,
seemingly at odds with one another. One is the traditional business
district with its vintage 1920s storefronts – some recently restored,
others boarded up -- situated close to the once populated pedestrian
walkways. The other is further west, featuring more expansive shopping
centers with national franchise stores and other larger businesses, and
an abundance of surface parking. These divergent development styles
reflect a conflict: do you suburbanize the city or do you build off its
historic streetscape, which was built before cars and personal
insecurity were issues for shoppers?

Jefferson East believes you can have both, and believes you can link
them through a thoughtful streetscape. “We recognize that there are a
couple sections of commercial development,” Garland says. “At the same
time, we’re saying we wouldn’t want to put up one random block of
streetscape.” There needs to be a continuous linkage all along East
Jefferson, to link isolated projects like Winston Place,
an apartment building under redevelopment, so they feel “part of a
neighborhood street.” Garland adds that this is more than landscaping
the street. It also involves a plan for parking, which is a critical
issue for development.

It is always morning at Joseph’s Coney Island
where Kole Nikollbibaj works 10 hours a day serving breakfast any time,
along with premium Coney dogs and a sandwich menu. He says, “there is a
very good possibility” of a dinner menu to come. He knows there is a
need and he aims to fill it. His customers are workers at the
DaimlerChrysler Jefferson Avenue Plant, at various construction
projects in the area, or are residents of the neighborhood. “I love the
eastside,” says the Kosovo native who was raised in Detroit. “It seems
so homey to me.”

Nikollbibaj, whose employees all come from Jefferson East, builds
his business on value, respect for his customers, and an honest work
ethic. “I put my heart and soul in this business.” That includes giving
hot dogs to church and community groups for special events.

Liabilities into assets

Despite the larger shopping strips that were developed on the west
end of the community, a greater challenge is stopping the deterioration
of the central business district, improving the facades, and marketing
the storefronts to small businesses, says Alan Levy, deputy director of
Planning and Development for the City of Detroit. Levy was formerly
director of the Mayor’s Office of Neighborhood Commerical
Revitalization.

The acquisition of the former BF Goodrich building represents “a
huge shift in the investment attitude,” says Levy. “People will buy a
property to flip it (sell it quickly for a profit) or sit on it and
wait for someone to clear it and use it for a strip mall, or they’ll
buy a property because they think if they improve it, it’ll be worth
more. This is definitely a sign of the third. She’s saying we’re
turning it from a liability to an asset. … I don’t know how much she
paid for it, and it wasn’t cheap, but it may be that what she’s doing
there will spur other things to happen. Our position is that all the
little things Jefferson East is doing – all the clean-ups, the murals,
working with the police department, becoming a Cool City – they’ve
determined that they’re a pretty good place for a technology and
entertainment incubator.”

Citing that the vacancy rate for the old storefronts remains about
50 percent, Levy says, “The situation was getting worse before
Jefferson East began doing what they’re doing. The key is that it
hasn’t gotten worse. … And the renovated buildings are leased. We’re
about at the point where values will start to go up. They stopped the
decline by organizing themselves. I’m not sure when it will be a hot
market, but it has that potential.”

Wanted: people with vision

Trek Computers
is an example of how Jefferson East could realize its Cool City vision.
Not only is it a new technology company, it’s owned by someone who
lives in the area. “I picked here because I was born and raised in this
neighborhood,” says Donnie Hall. “The other reason I picked this area
was that I saw the need to bring this service into this community. …
Most homes in this area don’t have computers and don’t even know about
the internet. If they do happen to play with the computer the first
(problem they have) they’re going to give up.”

Investing in Jefferson East is built on the faith of people like
Burnett, Hall, Marino and Nikollbibaj. But realistic challenges remain.
Although 25,000 cars pass through the area daily, there needs to be
more traffic. Although nearly 20,000 people, with a median household
income of $41,612, live in Jefferson East, there needs to be more
residents with disposable income. It’s a time for a calculated risk for
people with vision, and for people who care about the community. Only
the strong need apply. But most need to apply patience and fiscal
endurance.

But it’s still early. “It’s really on the ground floor, now,” Levy
says. “There’s always the possibility that the elevator won’t go up.
But we’re at the point where we know it won’t go down.”

From the East:Take I-94 West to Outer Drive
Exit 222A toward Chalmers Ave. Turn left onto Outer Dr. East and stay
straight to go onto Alter Rd. Turn right onto Jefferson Ave East and
arrive in Jefferson East.

From the North:Take I-75 South and merge onto
I-94 via Exit 53B toward Port Huron. Take the Conner Ave Exit 220B
toward the City Airport. Keep right at the fork in the ramp and stay
straight to go onto Conner St until you come up to Jefferson Ave E.
Arrive in Jefferson East.

From the West:Take I-96 East and merge onto
I-94 via Exit 190A toward Port Huron. Take the Conner Ave Exit 220B
toward the City Airport. Keep right at the fork in the ramp and stay
straight to go onto Conner St until you come up to Jefferson Ave E.
Arrive in Jefferson East.

From the South:Take I-94 East toward Detroit.
Take the Conner Ave Exit 220B toward the City Airport. Keep right at
the fork in the ramp and stay straight to go onto Conner St until you
come up to Jefferson Ave E. Arrive in Jefferson East.

Take I-75 North toward Detroit to I-96 West via Exit 48 on the left
toward Lansing. Then merge onto I-94 East toward Port Huron. Take the
Conner Ave Exit 220B toward the City Airport. Keep right at the fork in
the ramp and stay straight to go onto Conner St until you come up to
Jefferson Ave E. Arrive in Jefferson East.